Wednesday, October 13, 2010

Argentina Soyoil Exporters View End To China Spat With Wary Eye

Argentina's soyoil exporters are cautiously optimistic that China is poised to resume its purchases of soyoil, but they are waiting to see an actual sale go through before celebrating an end to the six-month old trade dispute.
An executive at one of Argentina's leading grain and vegetable oil said he is waiting to "see it to believe it."
In April, China--the world's largest importer of the edible oil--blocked imports from Argentine--the largest exporter--citing purity standards. But many saw the move as retaliation for a host of anti-dumping duties imposed by Argentina on imported Chinese goods.
Fueling scepticism over the resumption of soyoil sales is the fact that there seems to have been no progress in resolving the underlying conflict over trade barriers. In fact, Argentina has expanded the number of Chinese products hit by anti-dumping penalties in recent months.
Despite the tension, the Chinese appear to be more concerned with their domestic food prices. China is facing high inflation and Argentine soyoil is cheaper than what it is now buying from the U.S. and Brazil, said Ricardo Baccarin, vice president at local brokerage house Panagricola.
A senior trader with a large Chinese grain buyer said Tuesday that China's government is clearing new soyoil imports from Argentina, although no purchases have taken place yet.
China's Ministry of Commerce would support the resumption of soyoil imports from Argentina as long as there are no quality concerns, said Chen Rongkai, a ministry media official.
Argentine President Cristina Fernandez celebrated the news in a twitter post on Tuesday. "If it wasn't enough, China is buying oil again," Fernandez wrote.
Agriculture Minister Julian Dominguez told state news agency Telam on Monday there were signs that China would allow shipments to resume, although a foreign ministry spokesman on Tuesday declined to comment.
A resumption of sales to China would be a boon to Argentina's farmers, who were slow to sell this season and still have significant soybean stocks remaining, Panagricola's Baccarin said.

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